- Time is running out for the U.S. Securities and Exchange Commission (SEC). There is only one week left to question Grayscale Investments’ significant court victory.
- They can either invoke the U.S. Supreme Court by requesting a judicial decision or summon the Appeals Court for a comprehensive “en banc” review.
- Sam Kerbage, President of Hashdex, expects that the SEC may encourage Grayscale to reapply and believes that the stage is set for rejection for different reasons.
Time is ticking for the U.S. Securities and Exchange Commission (SEC); what are the possibilities and potential scenarios for appealing the decision?
The SEC’s Time Is Running Out: Tick Tock!
Time is ticking for the U.S. Securities and Exchange Commission (SEC). They have only one week left to challenge Grayscale Investments’ major court victory, and tensions are high. The Commission’s decision may not only shape Grayscale’s fate but also pave the way for spot Bitcoin ETFs.
The recent decision by the DC Court of Appeals shed light on the SEC’s conflicting stances. While approving Grayscale’s transition from Grayscale Bitcoin Trust (GBTC) to an ETF, it criticized the Commission for simultaneously greenlighting Bitcoin futures ETFs. Labeling the SEC’s actions as inconsistent would be an understatement.
Now, the ball is in the SEC’s court, quite literally. Their countdown to October 13 includes several potential moves. They could call upon the U.S. Supreme Court to request a judicial review, or they could summon the Appeals Court for a comprehensive “en banc” review.
Pantera Capital, in its latest communication to investors, downplayed the likelihood of Supreme Court intervention, citing that the case lacks sufficient legal weight. On the other hand, analysts at Compass Point Research & Trading expressed doubts about the acceptance chances of an “en banc” review. And if industry murmurs are to be believed, the SEC might altogether ignore the appeal.
Possible Outcomes and Their Implications
Even if the SEC withdraws from a direct appeal, they can continue to use their bureaucratic powers in subtler ways. They might attempt to bypass an explicit need for an appeal by rejecting Grayscale’s proposal for reasons other than those previously stated. Such an approach would echo the Ripple story, dramatically altering the digital asset landscape.
However, not everyone sees doom and gloom. Sam Kerbage, President of Hashdex, expects the SEC to encourage Grayscale to reapply, setting the stage for another rejection for different reasons.
Revisiting the proposal would initiate another exhausting 240-day review marathon. Ark Invest’s ETF decision is due on January 10, and other giant firms like BlackRock will line up shortly thereafter, making the clock even more critical.
Galaxy Digital’s research guru, Alex Thorn, suggests that January could be a turning point, with cards revealing either an approval or an outright rejection. A rejection could lead to chaos and speculative trading frenzies in the market. On the other hand, approval could signal a flood of traditional financial capital into the markets.
Spot Bitcoin ETFs: An Inevitable Horizon
Regardless of the SEC’s maneuvers or market reactions, there is a general consensus that spot Bitcoin ETFs will become a reality in the American financial world in the near future. Bloomberg Intelligence analysts pegged the likelihood of ETF approval by the end of 2024 at a surprising 95%.
However, let’s not kid ourselves. Given the SEC’s history of skepticism and foot-dragging in the crypto space, nothing is guaranteed. Nevertheless, as Joel Kruger from LMAX Group put it, the momentum of crypto is undeniable. As crypto awareness infiltrates public consciousness and regulatory frameworks evolve, the value proposition becomes increasingly apparent.
In conclusion, the near future may be filled with uncertainties and potential bureaucratic wrangling, but the bigger narrative is crystal clear. Crypto, with its irresistible momentum, is here to stay. The only question is whether the SEC will swim against the current or be carried along.
